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Europe D66 European Parliament

European foreign aid in desperate need of reform

   Mon 10/01/2000

The EU’s foreign aid programs have been burdened by ineffectiveness, unnecessary delays and a general lack of credibility. If the EU want to become a serious global player it will need a foreign aid strategy that can match its economic muscle. That can only be achieved by finally setting real policy priorities, developing a coherent corporate identity, becoming more flexible and more creative.

The European Union is the world’s most generous donor. From emergency aid and transfer of know-how to post-disaster reconstruction and macro-economic support, Europe is always ready to put its money where its mouth is. Regrettably, the EU’s foreign aid programs also have one of the worst reputations in the world: slow and bureaucratic, ineffective and inflexible. Even if the majority of the aid is effective and on time, regular slip-ups lead to damning annual reports from the Court of Auditors and negative headlines. These undermine the Union’s political credibility and demotivate hard working staff. It must therefore be a top priority for the new Commission to launch a dramatic overhaul of its foreign assistance programs from next-door Phare to far-away Lomé.

The timing has never been better. Firstly, the new commissioner in charge of foreign aid, Chris Patten, is an experienced heavyweight, who has control over most aspects of the foreign assistance program, which until now have been scattered between four commissioners. Secondly, the new Commission will have to prove to a stronger and more influential European Parliament that it is serious about addressing waste and mismanagement. Finally, the EU member states which have just appointed Mr. Solana as “Mr. Foreign Policy” will want to see their political ambitions followed up with effective action by the Commission.

Next week the European Parliament will ask the Commission to come up with a first blueprint for reform of the external assistance programs by 31 March 2000 [note to the editor: van der Laan report on discharge 1997 to be voted 18 or 19 January 2000]. Here are four suggestions to help the process along.

First and foremost, Europe must learn to set priorities. In Russia, the Commission is involved in virtually every policy area from energy and transport, through democracy and human rights to SME development and education. In Gaza the EU is building a hospital, in Istanbul it organises cultural exchanges, in Ghana it improves water supplies and in various parts of the globe it monitors elections. Foreign assistance is thus spread thinly over a large number of areas. Limited staff has to build up expertise in a large number of policy areas, increasing reliance on external consultants. In order to strengthen impact and put resources to their best use, aid should be limited to a restricted number of policy areas.

This implies a number of very tough decisions. Europe’s first choice should always be the promotion of democracy and human rights. We are not just a Union of ec onomic interests, but first and foremost a Union of shared values. We can leave certain jobs to other institutions: election monitoring can be left to the OSCE, which has built up a level of expertise in this field and has more credibility due to its broader based membership. Secondly, Europe should choose sectors that can not fend for themselves and leave the rest to the market place. Focus on environment, education or health and stay away from energy, telecommunications and transport. There is a lot of money to be made in the latter areas and market forces can act more effectively than bureaucrats. The EU should however give the market a helping hand by establishing the legislative framework within which it can flourish. This should then be the final priority choice. Once these limited policy choices have been made, Chris Patten needs to stick to them and not be tempted to take on new policy areas.

The second priority for Patten is for the Commission to start operating as a single entity. An often repeated complaint about European aid programs is their lack of visibility. European aid tends to be of better quality than American aid and there is more of it. Yet with a plethora of bizarre names like Tacis, Phare, Meda, and Echo it is not clear that it all comes from the same donor. The name “US AID”leaves nothing to the imagination. Is it then any surprise that the impact of EU aid is less than that of the Americans? EU aid is geared more towards effectiveness than show. And so it should be and so it should stay. But we also need to learn the importance of packaging and getting more “bang for the buck”. Part of the essential reforms should be to create a single European corporate identity. It should have a name and a logo instantly recognisable as European and should be consistently used all over the globe. When I worked for Tacis in Azerbaijan it was virtually impossible to explain to our local counterparts that the ECHO programme and the Tacis programme were not only both European but actually managed by the same institution: the Commission. Once this message had however taken hold, it was then bizarre to the locals that the ECHO and Tacis people hardly spoke to each other and did not know what the other side was up to. This is another problem that needs to be addressed: the fiefdoms inside the Commission need to be broken down. One corporate identity also means one political entity.

The key to efficient implementation is flexible procedures. In the Tacis programme the management was able to cut a 15 months programme cycle down to nine months. However, three of those months were reserved for translations required by a cumbersome regulation. Another example of the madness the member states impose on the Commission was the decision to place the Agency tasked with the reconstruction in Kosovo in Thessaloniki, rather than the more rational Pristina. It shows that Member States are still more concerned with getting their piece of the generous aid pie than with getting the aid to the beneficiaries. Their first question is “what’s in it for me?”, rather than “what’s in it for the third country?”. The sum of these national bouts of selfishness is damaging the Union’s aid effort as a whole. Member states now need to allow the Commission to get on with the job without asking for a Spanish contract for every German one that is signed.

Finally, we need to be more creative and stop re-inventing the wheel everytime there is a new country to rebuild. A number of creative frameworks need to be ready to spring into action when Europe needs it. Now a new regulation has to be adopted every time we want to help out a country. Stop trying to run everything from Brussels. Most Delegations are now strong enough to take on serious management tasks. Decentralise implementation to regional Agencies with a clear political mandate and adequate resources to get the job done. Refuse the demand of member states that their nationality be represented on every Agency board. Let companies, beneficiaries and member states co-finance where this can be efficient. Steal ideas from others where these have proven successful: is it not time for a European version of America's Peace Corps? The time for radical reform is now. If Commissioner Patten does not succeed in delivering, the Commission risks continuing to be blamed by the Member states for their lack of political will. Does Patten have what it takes? In a recent meeting with him I mentioned the hospital the Commission is building in Gaza. His first comment was: “I wonder whether we should be in the hospital business at all”. It is the right question to ask and a promising sign of things to come. The Commissioner will have to stand up to the Council’s petty short-sightedness whenever the details will be discussed. He must have the courage to refuse tasks for which the Commission lacks the resources. But mostly he will need to point to the Member States when their procedural requirements risk to undermine his efforts. The European Parliament will be watching him every step of the way.